In this article
Before listing: the documents
The energy performance certificate
Any change of tenant requires a valid energy performance certificate, and listings must show the energy and insulation classes. Commission one before advertising if you do not have a valid certificate. See our guide to the energy passport.
The capital invested
Luxembourg law caps annual rent at 5% of the capital invested in the home, revalued over time. Since 2024 you no longer have to state it in the lease, but you should know it: it is the basis on which a rent can be challenged before the rent commission. Keep the deeds and invoices for purchase and improvement works. Our guide to the 5% rent rule explains the calculation.
Co-ownership rules
In an apartment building, check the co-ownership regulation for rules on letting, furnished letting, or notifying the building manager of tenants. See our guide to buying in a co-ownership.
Setting the rent
Price the home against comparable current rentals in the same quarter, not against the highest listing you can find. A well-priced home lets quickly to a good tenant; an overpriced one sits empty, and each empty month costs more than a modest reduction. The rent must also respect the legal ceiling.
For furnished homes, the law allows a supplement linked to the value of the furniture. Keep the invoices.
Remember that the rent can be adjusted at most every two years, by at most 10% each time, and that indexation clauses are not valid in ordinary residential leases.
The lease
Since August 2024:
- The lease must be written. Oral leases are no longer valid.
- It must contain mandatory information, including the identity of the parties, the rent, the charges and the deposit.
- For a shared flat under a joint lease, a written colocation pact between the tenants is required. See our guide to colocation.
Use a lease that reflects the current law. Many templates circulating online predate the reform.
The deposit
- The deposit is capped at two months' rent, charges excluded.
- It is usually held in a blocked account in the tenant's name or covered by a bank guarantee.
- At the end of the lease, half must be returned within one month of the keys being handed back if the exit inventory shows no damage and no rent is owed; the balance follows the settlement of charges. Late repayment carries a penalty.
Our guide to security deposits sets out the details from the tenant's side; the same rules apply to you.
Agency fees
If you use an agency, its commission for a residential letting is now split 50/50 between landlord and tenant. You can no longer pass the whole commission to the tenant. See our guide to agency fees.
Choosing a tenant
Ask for a consistent file from every applicant: identity, employment contract, recent payslips, and a previous landlord's reference where available. Our guide to the rental application file describes what tenants typically provide. Decide on objective criteria, document your decision and treat applicants consistently.
The entry inventory
A detailed entry inventory, with photos, signed by both parties, is your main protection at the end of the lease. Without it, damage is hard to prove and deductions from the deposit are hard to justify. See our guide to the état des lieux.
Charges and the annual statement
If the tenant pays monthly advances on charges, you must produce an annual statement reconciling them with the actual costs, and provide supporting evidence if the tenant asks. Only costs that are genuinely recoverable can be passed on. See our guide to rental charges.
During the tenancy
- Repairs: you are responsible for keeping the home fit to live in and for major repairs. Respond promptly to reports. See our guide to repairs.
- Insurance: insure the property, and ask the tenant for proof of their home insurance if the lease requires it.
- Ending the lease: a landlord can only terminate for serious reasons; personal need requires six months' notice with justification. See our guide to ending a lease.
Tax
Rental income is taxable in Luxembourg, after deductible expenses such as loan interest, non-recoverable charges, maintenance and depreciation. Net rental income above €600 a year must be declared to the Administration des contributions directes on the annual tax return (model 100), using the schedule for income from letting built property. Owners of a property completed more than fifteen years ago can, as an alternative to itemising expenses, opt for a flat-rate deduction from the gross rent instead; check the current rate and ceiling with your tax office or adviser, since these figures are periodically revised and further changes to rental taxation were announced in July 2026. The treatment of depreciation also changed with the 2024 housing measures. Our guide to buying to let explains the position, and a tax adviser can model it for your property.
An alternative worth knowing is social rental management, in which an approved organisation rents your home, guarantees the rent and handles tenants, in exchange for a rent below the market and a significant tax exemption.
Short-term and furnished tourist lets
Letting a home on a short-term, tourist basis is a different activity from a residential lease and normally requires a separate authorisation from the commune, plus registration and, in Luxembourg City, compliance with any local rules on classified tourist accommodation. It also has different tax and insurance implications. If you are weighing a long-term residential tenant against short-term lets, treat the two as genuinely different businesses rather than a simple choice of price, and check the current commune requirements before advertising a short-term let.
Where letting goes wrong
- An outdated lease that does not reflect the 2024 rules.
- No proper inventory, so the deposit cannot be defended.
- A deposit above two months, which is unenforceable.
- Slow responses to repairs, which turn small issues into disputes.
- Late charges statements, which delay the return of the deposit and irritate tenants.
Our take
Letting in Luxembourg works well for owners who treat it as a small business: current documents, a lawful lease, a careful inventory, responsive maintenance and clear accounts. The 2024 reform made the rules clearer; it rewards landlords who follow them and exposes those who do not.
Aura Properties lets and manages homes for owners across Luxembourg City, from pricing and tenant selection to inventories, charges and renewals. See Rent with us or contact us.
Sources
This article explains the general framework of Luxembourg residential lease law and is not a substitute for legal advice on your individual contract. For official procedures and current forms, consult guichet.lu or your commune.
